Business | Banking
UAE banks await guidelines on provisions
UAE banks are unlikely to take loan-loss provisions in the second quarter on troubled Saudi groups Saad and Alghosaibi as they await directives from the Central Bank, bankers said.
- Reuters
- Published: 23:11 July 2, 2009
Abu Dhabi: UAE banks are unlikely to take loan-loss provisions in the second quarter on troubled Saudi groups Saad and Alghosaibi as they await directives from the Central Bank, bankers said.
The UAE Central Bank is expected to review exposure reports submitted by banks and advise them on how to provision against potential losses, they said.
Second quarter results of the banks are due to be announced from mid-July.
"It is too early for provisions as we are almost fin-alising our second quarter financials," said the chief financial officer of an Abu Dhabi-based bank that has exposure to the troubled companies.
"The Central Bank should tell us how much provisions we should take and whether the Saudi conglomerates are capable of restructuring their debts," he said, asking not to be named because his bank has banned officials from speaking about the issue.
At least four Abu Dhabi-based banks, National Bank of Abu Dhabi, Abu Dhabi Commercial Bank, First Gulf Bank and Union National Bank have exposures to the Saudi groups, according to banking sources or statements from the banks themselves.
"Yes, banks with exposure have informed the Central Bank but I don't think banks will be required to take provisions in the second quarter. We are expecting central bank guidelines later this month," another senior banker in Abu Dhabi said.
Business Editor's choice
-
‘Wrong Way' Krugman
The source of our economic malfunction lies with government-mandated bank regulations
-
Greek exit could make Eurozone stronger
Departure will show limits of bailouts and allow remaining members to act much more like a unit
-
UAE upholds values of free trade
Recently released statistics confirm an established fact, namely that of the UAE embracing the free trade principle in general and imports in particular
